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It is a widely understood phenomenon that the global financial markets react to the US Federal reserve’s stance on monetary policies. So last week, when the Fed indicated aggressive tightening on spending and a hike in interest rates in an attempt to control inflation, stocks all around the world tumbled. The crypto market was no different with Bitcoin (BTC) hitting its lowest since September 2021. In this article, we will take a look at the price trends of major cryptocurrencies and short term outlook for BTC.
Before the Bitcoin bulls could digest the sharp 11% correction last week and stage a moderate relief bounce, bets on interest rate hike by the Fed led the market participants to panic sell once again. BTC briefly traded below $40,000 for the first time in 5 months losing key support along the way. However, buyers stepped in near $39,650 and bought aggressively, evident from the long wick it had formed yesterday. BTC is currently trading at $41,700, up by 0.2% in the last 24 hours. It has to stay clear of the sub $40,000 levels in order to avoid further downtrend.
Ethereum (ETH) has formed several bear flags since November, which successfully played out to result in a steep dip from the $5,000 territory to the $3,000 mark today. However, with ETH being in oversold conditions and selling volume drying up, indications of a reversal seem imminent. Currently, ETH must first tackle the major resistance at $3,370, followed by $3,650. In the shorter time frame, flipping $3,150 should provide optimism to the bulls. On the downside, ETH has already reclaimed support at the $3,000 psychological level. Thus, confidence in an upward move remains high.
Most of the top 20 cryptocurrencies except BTC, ETH and dollar-pegged stablecoins were in the red for the last 24 hours except for Binance Coin (BNB), Polygon (MATIC), Terra (LUNA) and Near Protocol (NEAR). NEAR had a reversal of fortunes on Jan 10 after three consecutive red days and raked in 13% over the last day in spite of existing bearish sentiments. LUNA, MATIC and BNB barely managed to squeeze a gain (of around 1%). Among the top 20, memecoins Dogecoin (DOGE) and Shiba Inu (SHIB) bleeded the most with over 4% decline over the last day.
BTC is currently in oversold territory, indicating a relief rally sooner but whether it will be sustained or not for the long term is still not clear. As we iterated in previous articles, retail market participants have been muted in the crypto markets the last few weeks and a strong Q1 rally in 2022 is becoming unlikely. BTC will experience volatility in the upcoming days and is expected to consolidate between $38,600 and $45,000 for the short term.
Disclaimer: This article was authored by Giottus Cryptocurrency Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.